Oil up slightly as US leaders face fiscal cliff

The price of oil rose marginally Wednesday as President Barack Obama pushed ahead with talks to try to resolve the impending "fiscal cliff" that could derail the fragile recovery in the world's No. 1 economy.

By early afternoon in Europe, benchmark oil for December delivery was up 14 cents to $85.52 a barrel in electronic trading on the New York Mercantile Exchange.

Oil prices fell slightly Tuesday after the International Energy Agency predicted demand will grow at a slower pace into next year because of the sluggish global economy. The contract fell 19 cents to end at $85.38 per barrel in New York.

A package of tax increases and spending cuts takes effect in January unless the U.S. Congress passes a budget deal by then. The economy would be hit so hard that it would likely sink into recession in the first half of 2013, economists say.

But Obama this week kicked off a series of meetings with labor officials, business executives and congressional leaders aimed at working out a deal. White House aides say Obama intends to hold campaign-style events across the country after the Thanksgiving holiday to drum up support for his proposed solution to avert an economic downturn.

Oil prices gained some support from a weaker dollar, which makes crude cheaper for investors trading with other currencies. The euro was up to $1.2730 on Wednesday from $1.2702 late Tuesday in New York.

Brent crude, which is used to price international varieties of oil, was up 15 cents to $108.41 per barrel in London.